I may have stumbled on to something. Not sure why? I tried to put my water mark on other images in CS5 then I flattened image. Same thing happened. The original was sharp but one w/ watermark was blured and less quality. I tried to instead of flatten image, I merged visible. This seemed to work. I do not see a blur. Haven't tried fb yet but at least it is not happening on my screen. Wonder what the difference is between flatten image and merge image. Thanks for your help.